Neuropeptide Y (NPY) neurons in the hypothalamic arcuate nucleus (ARC) play an important role in feeding regulation. Plasma levels of ghrelin and insulin show reciprocal dynamics before and after meals. We hypothesized that ghrelin and insulin also exert reciprocal effects on ARC NPY neurons. Cytosolic Ca2+ concentration ([Ca2+]i) was measured by fura-2 microfluorometry in single neurons isolated from ARC of adult rats, followed by immunocytochemical identification of NPY neurons. Ghrelin at 10−10 M increased [Ca2+]i in isolated ARC neurons, and co-administration of insulin concentration-dependently suppressed the ghrelin-induced [Ca2+]i increases. Insulin at 10−16 M, 10−14 M, 10−12 M and 10−10 M counteracted ghrelin action in 26%, 41%, 61% and 53% of ghrelin-responsive neurons, respectively, showing a maximal effect at 10−12 M, the estimated postprandial concentration of insulin in the brain. The majority (>70%) of the ghrelin-activated insulin-inhibited neurons were shown to contain NPY. Double-immunohistochemistry revealed that 85% of NPY neurons in ARC express insulin receptors. These data demonstrate that insulin directly interacts with ARC NPY neurons and counteracts ghrelin action. Our results suggest that postprandial increase in plasma insulin/ghrelin ratio and insulin inhibition of ghrelin action on ARC NPY neurons cooperate to effectively inhibit the neuron activity and terminate feeding.